Funeral Planning: Pre-Need Insurance vs. Final Expense Insurance

In the U.S., only 45% of adults over age 55 have prepared a Last Will & Testament and even fewer have planned their own funeral. Though no one likes to think about their own death, taking care of the arrangements and cost of your funeral is a gift to your loved ones.

In the U.S., only 45% of adults over age 55 have prepared a Last Will & Testament and even fewer have planned their own funeral. Though no one likes to think about their own death, taking care of the arrangements and cost of your funeral is a gift to your loved ones.

The Cost Of A Funeral & Cemetery Plot 

Typically, a traditional funeral with viewing and burial services costs between $7,000 and $10,000 or more. However, this doesn’t include the cost of a cemetery plot and headstone  which can add another $1,000 to $4,000, depending on the location.   

Of course, if you’re open to cremation the costs are considerably less. A funeral with cremation and viewing services averages around $4,000 to $5,000. If you choose a direct cremation without viewing services, the cost drops to about $2,000.

Then again, when you consider that inflation drives up the cost of everything, certain types of insurance products you can purchase in advance may be a viable solution.  

“If you move to another state, it may be difficult to transfer a pre-need plan without additional fees, if at all.” 

The Pros & Cons Of Pre-Need Life Insurance 

Also known as prepaid funeral insurance, pre-need life insurance enables you to plan and pay for your funeral arrangements in advance. The beneficiary of the policy is a funeral home of your choice. Since there are no age or medical restrictions, pre-need life insurance is an option for those who don’t qualify for term life insurance or a final expense insurance policy. 

There are drawbacks — the policy may not transfer if the funeral home closes or changes ownership and your survivors can’t make any changes once the plan is locked in. If you move to another state, it may be difficult to transfer a pre-need plan without additional fees, if at all.   

The Pros & Cons Of Final Expense Life Insurance 

True to its name, final expense insurance covers your end-of-life expenses including funeral arrangements and any remaining medical or legal expenses. The beneficiary can be anyone you choose including a funeral home. However, with this type of policy your loved ones receive any remaining funds once all funeral expenses are paid. 

Though some insurance companies may apply minimal age and medical requirements, this type of policy is ideal for older retirees who have a chronic health condition that makes them ineligible for other types of life insurance. Of course, if you’re in relatively good health, other insurance products may be a better choice for covering your funeral expenses. 

Discuss this and many other situations with one of MyFederalRetirement.US Specialists.